Menard, Inc. - Page 57

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          substantiate the 3-year moving average, we must reject this                 
          portion of Dr. Hakala’s valuation methodology.                              
                    5.  Conclusion                                                    
               After evaluating both experts’ valuation methodologies in              
          light of the record, we now compare Mr. Menard’s TYE 1998                   
          compensation to the Black-Scholes values of compensation paid in            
          TYE 1998 to CEOs of Home Depot, Kohl’s, Lowe’s, Staples, and                
          Target.  With one exception,49 we use Dr. Hakala’s Black-Scholes            
          stock option values computed before discounts.                              
               The comparison group companies compensated their CEOs for              
          services performed in TYE 1998 in the following amounts:                    
                          Company            Compensation                             
                         Home Depot          1$2,841,307                              
                         Kohl’s              5,110,578                                
                         Lowe’s              6,054,977                                
                         Staples             6,868,747                                
                         Target              10,479,528                               
               1Home Depot did not compensate its CEO with stock options or           
          restricted stock awards.                                                    




               49Pursuant to rule 201 of the Federal Rules of Evidence, we            
          take judicial notice of the TYE 1998 proxy statements filed with            
          the Securities and Exchange Commission to the extent that they              
          represent reported compensation for TYE 1998.                               
               Target’s proxy statement for its TYE 1998 reported that the            
          options awarded to the CEO for that year included all options               
          that would be granted to the CEO over a 3-year period.                      
          Accordingly, for the Black-Scholes value of Target’s CEO’s stock            
          options in TYE 1998, we use only one-third of the value that Dr.            
          Hakala computed.                                                            




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